More than 1 million gripes about financial businesses filed with CFPB could be kept from public view

The U.S. government’s consumer watchdog agency may delete
more than 1 million complaints about companies from its website, the agency’s
Trump-appointed leader told the Senate Thursday.

The Consumer Financial
Protection Bureau launched a review of its public complaint database in March
with a formal request for comments from the public.

The complaints are searchable
on the CFPB website – minus people’s names and identifying information – with gripes about
banks, credit cards, debt collectors and other financial businesses. They
extend back to 2011.

“Are you using this RFI [request for information] to remove
it from public view?” Sen. Catherine Cortez Masto, D-Nev., asked during a hearing
before the Senate Banking Committee.

“It’s not my intent –
it is one option available,” CFPB acting director John M. “Mick” Mulvaney replied.
“If I make that decision, it’s completely my decision under the statute,” he
added. The comment period ends June 4, 2018.

Contentious CFPB
hearings on Capitol Hill

The exchange capped two days of contentious hearings for
Mulvaney on Capitol Hill. Democratic lawmakers blasted him for the bureau’s
inactivity, with zero
enforcement crackdowns on companies since he was appointed by President
Trump in November 2017. That followed the resignation of Obama-appointed
Director Richard Cordray.

Mulvaney, and allies in the Republican Party, said the
criticism of his deregulatory policies just proves their argument that the
bureau’s sole director has too much latitude. The CFPB budget comes from the
Federal Reserve, without Congressional approval.

“I don’t know if any director of any bureaucracy has come to
you and said, ‘Please take my power away,’ but that’s what I’m doing,” Mulvaney told
the committee.

The Dodd-Frank
Act made the agency independent of Congress to insulate it from industry
influence. The president has limited authority to replace a CFPB
director, once confirmed by the Senate.

"I don't know if any director of any bureaucracy has come to you and said, 'Please take my power away,' but that's what I'm doing."

Appeals court
considers whether to remove Mulvaney

Also Thursday, a panel of the U.S. Court of Appeals for the
District of Columbia Circuit heard arguments on whether Mulvaney’s appointment
by the White House violated the agency’s independence.

The panel of three
judges sounded skeptical that they could permanently replace Mulvaney with his
challenger – Leandra English, Cordray’s deputy director.

However, they raised the possibility that Mulvaney might be
disqualified from the job because of his other role as director of the Office
of Management and Budget. The OMB is not supposed to have oversight of the consumer
bureau.

A ruling on that basis would allow President Trump to
appoint another acting director. English “might get her job back for half
a day, or an hour or so, until the president names somebody else,” Judge Patricia
A. Millett said.

Administration on record against public complaint data

Mulvaney said his mind is not made up about removing the
complaints from public view.

However, the Trump administration has previously signaled
its desire to drop the public database. A June 2017 report
from the Treasury recommended that only government agencies – not the public –
should have access.

“Commenters have
objected that the database may provide misleading or incomplete information to
consumers because it does not indicate whether a complaint reflects
dissatisfaction with legitimate terms of service, as opposed to actual
wrongdoing,” the report states. Industry groups are among the critics of
the public database.

Among the questions the CFPB is asking in its information
request is whether the advantages of posting company names publicly outweighs
the disadvantages.

Consumer advocates and researchers say the CFPB’s public complaint data
are a boon for checking out companies and understanding the pitfalls of financial
services.

“This has been a hugely important resource for policymakers
and academics,” Southern University Law Center professor Chris Odinet said on
Twitter. “We don’t want to see it closed to the public.”

Consumer advocates and researchers say the CFPB's public complaint data are a boon for checking out companies and understanding the pitfalls of financial services.

How to check out a
company’s complaint file

The CFPB’s complaint database has more than 1 million
complaint records aimed at financial service companies going back to 2011.

If
company name doesn’t come up, try another version. For example, Chase Bank is
listed under
JPMorgan Chase & Co, and Midland Funding is under Encore Capital Group.

Results will show the total number of complaints
and list them, starting with the most recent.

You can narrow the search by selecting a
“product” such as credit cards, student loans, debt collection, etc.

Drill into the details by clicking on individual
complaint records.

How the CFPB
handles consumer complaints

When the CFPB gets a consumer complaint, it contacts the
company and verifies that the person is a customer.

Then it tracks the
company’s response – including whether the company paid a refund or not. Most
complaints are published on the website within 15 days, the time frame for
companies to respond. A major exception: The CFPB refers complaints about
smaller banks – those with under $10 billion in assets – to other regulators.

The Dodd-Frank Act requires the CFPB to listen to consumer
complaints and try to help resolve them. It doesn’t require the bureau to
publish complaint data.

The CFPB made the data public to give consumers a way of
checking out a company’s record. The move was also designed to put pressure on
companies to fix problems that generated complaints from customers.

Consumers voice opinion on CFBP complaint database

The few comments filed so far display a range of opinions.

“Transparency enables the public to recognize possible
complaint patterns,” Atlanta resident Randy Hubbell wrote. “Consequently,
public records will motivate the most complained about companies to adapt or
update unfair or unlawful practices.”

“Please keep publishing consumer complaints!” wrote Becky
Thelen, who did not give her address. “This holds companies accountable for
their actions, or lack of action, and it allows other consumers to adequately
vet companies.”

Researcher Zachary Heller recommended that the data do a
better job of identifying banks. The bank names used in the data are too ambiguous
to identify specific entities, making it impossible to match them with other data,
he wrote.

“The data here should be more structured and include the
specific [Federal Deposit
Insurance Corp.] FDIC ID so we can better join external databases,” Heller
commented.

How to file a comment
about the CFPB’s public complaint database

The Consumer Financial Protection Bureau is asking the
public to comment about its open database of complaints about companies.

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